Bear-Market Rally Charts
Here is a chart of the S&P 500 bear-market rally that occurred in April of 2001:
After making a double-bottom near 1100, the market rallied about 200 points in 6 weeks, and made a head-and-shoulders top around 1300. After it dropped beneath the “neck line” of the top at 1250, the bears were off to the races eventually taking the S&P 500 down to 800 in October 2002.
Here is a chart of the S&P 500 bear-market rally that occurred in January of 2001:
The red lines outline the “rising wedge” pattern. This wedge was launched with a monster rally on January 3, 2001, and ran up about 100 points until it ended on February 2, 2001 with a double peak.
This wedge looks a lot like the market here in May 2008, which I wrote about in this post.
May 6th, 2008 at 12:04 am
Matt -
Can you extend the chart a little forward to include the bottom as well?
May 6th, 2008 at 9:18 am
Hi Paul,
That would stretch the chart out too far. The goal of this page is to zoom-in on previous bear-market rallies to see what they looked like. But I have added a note above mentioning that the S&P 500 did eventually dive down to 800.
Matt